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SAP General Ledger Configuration

SAP R/3 ENTERPRISE ECC6

Published by Team of SAP Consultants at SAPTOPJOBS

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Copyright 2009-11@SAPTOPJOBS

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TABLE OF CONTENTS

1. INTRODUCTION 4

2. COMPANY CODE CONFIGURATION 6

2.1 Define Company 6

2.2 Creating a Company Code in SAP 8

2.3 Assign Company Code to company 13

2.4 Create Chart of Accounts in SAP 15

2.5 Assign Company code to Chart of accounts 18

2.6 Define Business Area 20

2.7 Define Account Group 23

2.8 Define Retained Earnings Account in SAP 26

2.9 Maintain Fiscal Year Variant 29

2.10 Assign Company Code to a Fiscal Year Variant 31

2.11 Define Posting period Variant 34

2.12 Open and Close Posting Periods 36

2.13 Assign Posting period Variant to Company code 39

2.14 Create document number ranges for company code 42

2.15 Copy document number ranges to fiscal year 46

2.16 Define document type and assign document number range 49

2.17 Enable Fiscal Year Default 50

2.18 Enable Default Value date 51

2.19 Maintain Field Status Variants 52

2.20 Assign Company Code to Field Status Variants 56

2.21 Screen variants for document entry 57

2.22 Define Tolerance Groups for Employees in SAP 59

2.23 Assign User/Tolerance Groups 64

2.24 Maximum Exchange Rate Difference 66

2.25 Check Company Code settings in Global parameters 68

2.26 Define Additional Local currencies (Optional) 72

2.27 Define Additional Local currencies for Ledgers (Optional) 77

2.28 Check Calculation Procedure 82

2.29 Assign Country to Calculation Procedure 87

2.30 Define Tax Codes for Sales and Purchases 89

3. CREATING G L ACCOUNT CODES IN THE CHART OF ACCOUNTS 97

3.1 Create GL account in Chart accounts and company code 97

4. CONFIGURATION FOR GL AUTOMATIC CLEARING: - 104

4.1 Automatic Clearing 104

4.2 Define Tolerance Groups for G/L Accounts 107

4.3 Assigning accounts for GL Clearing Differences 109

5. CONFIGURATION FOR FOREIGN CURRENCY VALUATION 112

5.1 Define Valuation methods 113

5.2 Assign GL accounts for Foreign Currency valuation 118

6. CONFIGURATION FOR REGROUPING POSTINGS 124

6.1 Define Adjustment Accounts for GR/IR clearing 124

7. CREATING BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 129

7.1 Define Financial Statement Version (FSV) 129

8. FI INTEGRATION WITH OTHER MODULES 150

8.1 Integration with Overhead Cost Controlling 150

8.2 Integration with Materials Management 152

8.3 Integration with Sales and Distribution 170

1. INTRODUCTION Let’s get started. First we will go through a bit of introduction about the SAP Finance Module before we grind in further: SAP FI (Financial accounting) is the basic module and very important module in SAP. SAP FI module receives posting from the various other modules such as MM (Materials Management), SD (Sales and Distribution), and HR (Human Resource) through various integration points. All the posting from the aforesaid modules are posted real-time to FI module. FI module feeds in data to CO modules such as Cost center ac counting, profit center accounting and the Profitability analysis module. SAP FI module is geared for external reporting i.e. legal reporting, tax reporting. Lets also touch base on some other organizational structures, which are important a) The plants created in the logistics (General) module are assigned to the company code. That means all transactions taking place in the plants are posted to the attached company code in SAP FI. b) The purchasing organization created in the MM module is attached to the Company code. c) The sales organization created in the SD module is attached to the company code. d) A company code created is assigned to the Controlling area. To help you understand the SAP terminologies we will go through a relevant example which will help you configure the system more effectively.

In this SAP training, we will configure a company code 1100 (ABC Ltd) located in USA. The currency in USA is USD; therefore the currency of the company code will be USD. We consider the reporting period in that country as Jan to December. We will also in this document cover briefly the FI - MM integration, FI- SD integration. The parent company of ABC Ltd is located in Germany. Therefore ABC Ltd is required to report figures in EURO. We would therefore need to configure parallel currencies to have such reporting possible.

2. COMPANY CODE CONFIGURATION Let us discuss the company code configuration in the below steps.

2.1 Define Company

Menu Path IMG Enterprise Structure Definition Financial Accounting

Define Company In the SAP scenario, functions involved in consolidation of financial accounting are based on companies. A company can comprise of one or more company codes. We will create a company 1100 to which we will assign our company code. Click on and update the following: -

Click to save entry.

2.2 Creating a Company Code in SAP A balance sheet and profit & loss account can be extracted for a Company code which is the basic organizational unit in SAP FI (Financial accounting) Company code is the bare minimum structure required for a SAP system. We will create company code 1100 (XYZ Ltd.) which is located in country USA. For configuring Company code we will use the following path on the SAP application screen:-

Menu Path SAP Menu Tools Customizing IMG SPRO - Edit Project

Transaction Code (SPRO) Configuration for all the modules will be done here. The above path will not be referred henceforth; we will directly refer to the IMG node. IMG Enterprise Structure Definition Financial Accounting

Define, copy, delete, check company code Double click on Edit Company Code

Whenever you select the second option Edit Company Code data you have to configure all the subsequent assignments manually. When the first option is selected all the configuration and tables get copied automatically along with assignments. In the cases of rollouts this option can be selected.

In the Copy option you need to click on to copy a company code from an existing company code. You can copy from existing company code delivered by SAP. A four-character alpha-numeric key as the company code key can be selected. This key identifies the company code and must be entered when posting business transactions or creating company code-specific master data, for example. With the help of following SAP tutorial material we will cover the Financial Accounting configuration from its roots and rather than copying it from a prevailing SAP company code.

Click on and Update the following required fields:

Ideally, In a SAP system the company code should be always kept numeric. Country: This field is for the purpose that where the concerned company code is located and the balance sheet and income statement which will be prepared according to that particular country’s law. In our present case the company is located in USA, so we have selected the country id US (USA). Currency: This field represents the local reporting currency of the country. In this case it is USA (US Dollars) since the company is located in USA.

Click on Address and update the following fields

Click Click to save entry. In this way company code 1100 is created in SAP

2.3 Assign Company Code to company

Menu Path IMG Enterprise Structure Assignment Financial Accounting Assign Company code to company Assign company code 1100 to company 1100 in SAP.

Click on Save

2.4 Create Chart of Accounts in SAP

Menu Path IMG Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Edit Chart of Accounts List

Transaction Code (OB13) The Chart of Accounts is a variant which contains the structure and basic information about the general ledger accounts. We have to create one chart of accounts for each company code in SAP. This chart of accounts is assigned to the company code. One chart of accounts can be used by more than one company codes. These imply that the general ledgers of these company codes can have similar GL structure. Under here we will define just a chart of accounts code in SAP. The GL codes are not defined here.

Click on and update the following fields

We can have controlling integration i.e.

a) Manual creation of cost elements or b) Automatic creation of cost elements.

It is preferable to have manual creation of cost elements in SAP Financial Accounting. We have to keep in mind that whenever we create a GL code (expense or revenue account) in Financial Accounting, at the same time we have to create the cost element (type 1 or 11) in the Controlling module of SAP system. This allows cost to be flown from FI to CO on a cost object in realtime. Click to save entry. This way USCA chart of accounts is created in SAP.

2.5 Assign Company code to Chart of accounts

Menu Path IMG Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Assign Company Code to Chart of Accounts

Transaction Code (OB62)

Assign USCA in the Chrt/accts field to company code 1100.

Click to save entry. Thus Company code 1100 is assigned to USCA chart of accounts in SAP.

2.6 Define Business Area

Menu Path IMG Enterprise Structure Definition Financial Accounting

Define Business Area. In order to organize and manage different divisions or segments, e.g. geographically or product wise etc. in better way in SAP, they can be defined and maintained as Business Areas which helps to serve the internal as well as external reporting. (For example this can help you to serve a report as required by the Segmental Reporting as required by the International Accounting Standards – 14)

Click on and update the following fields.


2.7 Define Account Group

Menu Path IMG Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Define Account Group

Transaction Code (OBD4) Since a chart of accounts contains many types of accounts, all these accounts can be bundled into different account groups. Those accounts which have got similar kinds of business functions can be clubbed together under one account group. For example, one can have an account group for cash accounts, one for expense accounts, one for revenue accounts, and one for other balance sheet accounts, etc. Moreover we can control the number range and the creation of the GL codes within the specified number range. We can copy from the account group delivered by SAP for INT chart of accounts or we can create new account group required as per customer requirement. To copy from other account group we need to mark the chart of accounts in the following manner: -

Thereafter click on the copy icon and change the Chart of accounts description to USCA. If you want to create from scratch in SAP you need to click on

and update the following fields.

Click to save entry. This way Account groups are created for chart of accounts USCA in SAP.

2.8 Define Retained Earnings Account in SAP

Menu Path IMG Financial Accounting General Ledger Accounting G/L Accounts Master Records Preparations Define Retained Earnings Account

Transaction Code (OB53) We have to assign a retained earnings account to each P&L account by specifying a P&L statement account type in the chart of accounts area of each P&L account in SAP. We must have minimum one retained earnings account. The system carries forward the balance of the P&L account to the retained earnings account in SAP at the end of a fiscal year. We can define one or more P&L statement account types per chart of accounts and assign them to retained earnings accounts. We have to update chart of accounts USCA in the given field

Update the following fields

Enter X in P& L statmt Enter the account code for Retained earnings account.

Click We will get a message “Account not created in chart of accounts USCA”, ignore it by pressing enter. Click to save entry. In this way Retained-earning account is created for chart of accounts USCA in SAP. We need to create this GL code later on at the GL code creation stage.

We can create multiple retained earnings accounts in SAP, where in We need to enter different key such as Y or Z and different GL codes. We also create another retained earnings account with a key Y and GL code 315095 – Retained earnings account (Local – Parent) This retained earnings account is required to carry on the difference between the local reporting and parent reporting. For example:- As per the local law the depreciation is calculated at 10% Straight line method (works out to 20000 USD) whereas as per the parent companies reporting the depreciation rate is 15% SLM (works out to 22000 USD). Thus the depreciation calculated will be different for local and parent. Thus the profit reported will be different and the profit carried forward to the balance sheet will be different. In a SAP system we can take care of this difference which has occurred due to the different methods of calculating depreciation by creating different GL codes. Example: The local depreciation is posted to GL code 460001 Depreciation Local 2000 USD The depreciation for the parent is posted as a difference between local and parent (22000 USD – 20000 USD = 2000 USD) to GL code 460002 Depreciation local – parent 2,000 USD The GL code 460001 is mapped to retained earnings account X and the GL code 460002 is mapped to retained earnings account Y in SAP.

2.9 Maintain Fiscal Year Variant

Menu Path IMG Financial Accounting Financial Accounting Global Settings Fiscal Year Maintain Fiscal Year Variant (Maintain Shortened Fiscal Year)

Transaction Code (OB29) We can define the following characteristics for a fiscal year variant in SAP. To separate business transactions into different periods, a fiscal year with posting periods has to be defined. The fiscal year variant defines the number of posting periods a fiscal year can have, along with the special periods we need, this helps the system is to determine the posting periods when postings are done. When defining the fiscal year, we can choose out of the following options:

• The fiscal year is the calendar year In this case, we must only select the Calendar year field. • the fiscal year is not the same as the calendar year and is not

year dependent In this case, we first enter the number of the posting periods in the Number posting per. field. To define the posting periods, select our fiscal year variant and select Periods on the navigation screen. On this screen, enter the month and the day of the period end and the period in each case.

• The fiscal year is not the same as the calendar year and is year-dependent.

We can enter the number of posting periods in the field Number posting periods and select the field Year-dependent. To define Our posting periods, select Our fiscal year variant and select Periods on the navigation screen. The system asks for which calendar year Our year-dependent fiscal year variant is valid. We then enter the month and day of the period end for each of Our periods, and the periods themselves. We can use the standard fiscal year variant K4 in SAP where the financial accounting year corresponds to January to December.

In case the financial accounting year is April to March, We can use the standard fiscal year variant V3 in SAP

We can copy and create new variants, but we should keep in mind that it should start with Z as the starting character.

In our example we will use the standard fiscal year variant K4

2.10 Assign Company Code to a Fiscal Year Variant

Menu Path IMG Financial Accounting Financial Accounting Global Settings Fiscal Year Assign Company Code to a Fiscal Year Variant

Transaction Code (OB37) The company code 1100 needs to be assigned to a Fiscal Year variant. This controls which periods the company code will post data.

Assign company code 1100 to K4 fiscal year variant in SAP.

Click to save entry. Thus Company code 1100 is assigned to fiscal year variant K4 in SAP.

2.11 Define Posting period Variant

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Posting Periods Define Variants for Open Posting Periods To separate business transactions into different periods, a posting period variant has to be defined so that transactions entered or posted are reflected in specific periods only. For this firstly we need to define opening posting period. Here, we can define variants for open posting periods. In the standard setting, a separate variant for posting periods is defined for every company code. The name of this variant is identical to the company Code name. Every company code is allocated to this variant with the same name. In our example we will have posting period variant which is identical to the company code i.e. 1100

Click on and update the following fields.

Click to save entry. Thus posting period variant 1100 is created.

2.12 Open and Close Posting Periods

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Posting Periods Open and Close Posting Periods

Transaction Code OB52 Here we specify for each variant which posting periods are open for posting in SAP. Two intervals are available for doing this (period 1 and period 2). For every interval, enter a lower period limit, an upper period limit and the fiscal year. We close periods by selecting the period specifications so that the periods to be closed are no longer contained. We can copy the settings from existing company codes delivered by SAP as follows:-

Select the area

Click the Copy button.

Replace all 1000 with 1100

Click to save entry. Thus posting periods time intervals for various account types are created for variant 1100 in SAP Standard Account Types in SAP are as follows:- (We can have more number of Account Types depending upon the nature of the activities) A – Assets D – Debtors K – Creditors M – Material S – GL

2.13 Assign Posting period Variant to Company code

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Posting Periods Assign Variants to Company Code The posting period variant 1100 needs to be assigned to company code 1100 Assign 1100 to company code 1100

Click to save entry. Thus posting period variant 1100 is assigned to company code 1100 in SAP.

2.14 Create document number ranges for company code

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Document Number Ranges Define Document Number Ranges.

Transaction Code (FBN1) We have to create the number ranges for each and every document type. For each number range created for the document type we can specify the following,

a) a number interval from which document numbers are selected b) the type of number assignment (internal or external)

One or more document types can be assigned to each number range. The number range becomes effective via the document type specified in document entry and posting. Number ranges for documents are company code-dependent. We must therefore create the number ranges for each company code in which the document type is used, namely with the same number range key. The number intervals must not overlap. If We use year-dependent number ranges, We can specify the same interval with the same key several times for different "to- fiscal years" (the limit up to which a number range is still valid). If we want to define number ranges,

which are independent of the to-fiscal year, enter 9999 in the to- fiscal year field. For sample documents, use a number range with key X2, for recurring entry documents with key X1. These keys may not be used for other number ranges. To copy from another company code:-

Click on copy and update the company to be copied from 0001 and company to be copied to 1100.

Click

We get the following message:-

The number ranges are not transported automatically. It is advisable that we manually maintain number ranges in each system (quality, production).

To manually create number range proceeds as follows:-

Click on

Click on and update the following fields:-

Then click on the button Similarly enter number key 01 to 99, X1 and X2 with no overlaps in the number range. Number range, which is used for depreciation

posting, should be defined with tick on. Click to save entry. These way Document number ranges are created for company code 1100. These number ranges are year dependent. For company codes posting the number ranges should be defined as year dependent. We have to keep in mind that the number intervals are not included in the customizing request they need to be transported manually. Click on Interval Transport

2.15 Copy document number ranges to fiscal year

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Document Number Ranges Copy to Fiscal Year

Transaction Code (OBH2) Every year we need to maintain the number ranges in Financial Accounting for our company code. This can be done by copying number ranges from earlier fiscal year. Update the following:-

Click

Click

2.16 Define document type and assign document number range

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Document Header Define Document Types

Transaction Code (OBA7) Standard document types can be used which is already existing in the SAP system. We have to make sure that the number ranges are correctly assigned to the document types Here We create document types for customer, vendor and general ledger business transactions in Financial Accounting. Document types differentiate business transactions and control document filing. We specify a number range for each document type. Document numbers are chosen from this number range. We can use one number range for several document types. Document types are valid for all clients. We specify a number range key for each document type. We create the desired number range intervals for each number range key based on the company code. This means that We can specify intervals of different sizes for the same number range.

2.17 Enable Fiscal Year Default

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Default Values for Document Processing Enable Fiscal Year Default Here We determine that a fiscal year is proposed during document display and for document change functions in SAP. The system uses the year which was last used by the user in the work session. This option is only useful for company codes working with year-dependent document number ranges.

Click the check box


2.18 Enable Default Value date

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Default Values for Document Processing Default Value Date When entering line items in SAP, We may need to enter a value date. In this activity We can determine, per company code, whether the CPU date is defaulted as the value date.

Click on Propose value date check box


2.19 Maintain Field Status Variants

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Line Item Controls Maintain Field Status Variants Field Status determines the appearance of each screen along with the fields inside that screen. We can control the status of a field in the following order and manner, S Suppress (We can’t view or operate the field) D Display (We can only view the field) R Required (The field must be present) O Optional (The field is open for display and operation) We can define and edit field status variants and groups. We group several field status groups together in one field status variant. We assign the field status variants to a company code in the activity Assign Company Code to Field Status Variants . This allows us to work with the same field status groups in any number of company codes. We can also define and process field status groups. We must define a field status group in the company code-specific area of each G/L account. The field status group determines which fields are ready for input, which are required entry fields, and which are hidden during document entry. Bear in mind that additional account assignments (i.e. cost centers or orders) are only possible if data can be entered in the corresponding fields.

Field status variant 0001 is entered for company code 0001 in the standard SAP software. Field status groups are already defined for this variant.

The field status group We enter in the reconciliation accounts affects postings to the related customer or vendor accounts. We cannot enter a field status group in the customer or vendor accounts. Field status groups are determined for customer and vendor accounts from their respective reconciliation accounts, via the G/L account number in their master records. There are other factors, besides the field status group itself, which have an influence on the field status. Among these are: The field status defined for the posting key. The status "optional entry field" was assigned to posting keys 40 and 50 in the standard system. These are the standard posting keys for G/L account postings. The "optional entry field" status has no effect on the field status. Copy the Standard Field status variant 0001 to create new field status variant 1100. The field status variant 1100 can be attached to all the group company codes of XYZ Ltd.

Click on Copy

Select the SAP standard variant

And change the field status variant from 0001 to 1100

Click on Copy all


Thus field status variant 1100 is created.

2.20 Assign Company Code to Field Status Variants

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Line Item Controls Assign Company Code to Field Status Variants Here, we assign the company codes in which we want to use identical field status groups, to the same field status variant. Assign company code 1100 to field status variant 1100.

Enter field status variant 1100


2.21 Screen variants for document entry

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Line Item Controls Screen Variants for Document Entry We determine the screen variant dependent on the company code. The screen variant, which we specify for each company code, addresses special screen appearance for documents for several specific functions in SAP. For Example: In an USA company code, for example, a screen with fields for withholding tax is required when entering a vendor item. We therefore have to select a special screen variant for US company codes. Select the option, which is required. In our example we will select the standard version only

The screen variant field is already blank, so no need of saving entry.

2.22 Define Tolerance Groups for Employees in SAP

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Line Item Define Tolerance Groups for Employees

The tolerance groups can be defined as predefined limits in amounts or percentages by which receivables may be underpaid or overpaid.

In the SAP system we can specify in advance various monetary limits for our employees with which we determine:

a) the maximum document amount the employee is authorized to post

b) the maximum amount the employee can enter as a line item in a customer or vendor account

c) the maximum cash discount percentage the employee can grant in a line item

d) the maximum acceptable tolerance for payment differences for the employee.

Payment differences are posted automatically within certain tolerance groups. This way the system can post the difference by correcting the cash discount or by posting to a separate expense or revenue account. In this respect we define:

• the amounts or percentage rates up to which the system is to automatically post to a separate expense or revenue account if it is not possible to correct the cash discount or

• up to which difference amounts the system is to correct the cash discount. In this case the cash discount is automatically increased or decreased by the difference. Using tolerance groups.

We can also additionally differentiate these settings by company code. Since the same rules usually apply to a group of employees, enter the values for employee groups. We can then enter amount limits and tolerances per employee group and company code. We can also define tolerances without specifying a tolerance group. Leave the field Grp empty in this case. The stored tolerances are then valid for all employees who are not allocated to a group. There must be at least one entry for every company code. We can also specify tolerances for clearing procedures depending on Wer customers or vendors. The lower limits from the customer/vendor specifications and employee group are taken in each case during clearing. In our example we will define a blank tolerance group for company code 1100. We can use existing tolerance group from the sample company code. Select company code

and click on Copy

and replace company code 0001 with 1100.


Double click on 1100 line item

The cash discount per line item for a user is 5% and he can post amount per document to the above limits. Further the user can per open item to the above given limit. The permitted payment difference for revenue and expense is 511.29 USD or 10 % whichever is lower. Thus this is a blank tolerance and applicable to all user ids. If the company wants to control posting per user id in a company code, then a tolerance group needs to be defined e.g. ZMGR, ZEXE, ZSUP, ZCL and each groups will have different limits. The user ids in the next step have to be assigned to the tolerance group.

2.23 Assign User/Tolerance Groups

Menu Path IMG Financial Accounting Financial Accounting Global Settings Document Line Item Assign User/Tolerance Groups The users have to be assigned to the tolerance group. Click on And update the user id and the tolerance group


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